FROM THE ARCHIVES.
“The key to success in such a fast-changing environment isn’t developing clairvoyance. It’s being open to numerous possibilities, having the discipline to experiment with conflicting strategies and moving quickly to embrace one of them when the direction of the market becomes clear.”
In his article, In Tech World, Good to Great to – Gone? in Sunday’s Washington Post Business Section, Steven Pearlstein was talking about the rise and rapid fall of several market-leading technology companies, but he could have been talking about any company—or any association—operating in today’s mercurial environment and attempting to plan for the future.
As their customer base ebbed away and their competitors grabbed market share, the tech companies Pearlstein uses as examples—Nokia, Research in Motion, Best Buy, and Circuit City—failed to see it as a warning that their world had already changed, and failed to act to change with it. They failed to see, as Pearlstein says: the “danger faced by dominant firms that refuse to give up existing sales in order to get the jump on next-generation products and services.”
In the words of Jim Collins, Nokia, et. al., had gone from “good to great.” And, then they stopped improving, believing they had secured their customers for life. Instead of their customers, they focused on the price of their stock. Because they envisioned a future that looked exactly like their present, they lost touch with the customers, their markets, and their competitors. And, as a result, these companies went down in flames.
This sounds like a lot of associations today. Used to dominating their markets—being the “go to” information resources, or certifiers, educators, influencers—associations are also failing to see the warning signs that their members’ worlds have changed, and are failing to act to get in front of or even keep pace with that change.
Associations’ New Normal
Instead, many associations have accepted a “new normal” defined by fewer members, fewer products and services, fewer staff, lower revenues, and reduced influence. They are watching membership, advertising revenue, and conference attendance continue to stagnate or decline, and failing to see these trends for what they are—a warning that members and customers are already looking elsewhere for the products and services in which the association used to dominate the market.
Like the failing tech companies, associations are stuck in the moment in time when they were the most successful. They envision only one future—where the association retains or regains its market leadership by pushing “new and improved” versions of the same old thing (membership, chapters, conferences, webinars, publications, a Facebook page, etc.). They cling to inflexible, top-down governance and staff models that make it impossible for the association to understand, track or respond quickly to changing member needs or adjust course to pursue developing opportunities. They cherry-pick “best practices” from other associations and dismiss for-profit competitors as unworthy of imitation (just as many are reading this blog and thinking: “This has nothing to do with our association, we’re not a tech company”). They believe that as long as they stick to their guns and do what they have always done, “as soon as the economy improves,” the members will return on their own.
For comparison, consider another article in the Business Section today, a reprint of Farhad Manjoo’s Slate article “How Apple Invented the iPhone.” It’s about how Apple “set out to create an iPod killer before any of its competitors could.” It’s a fascinating story not only about the development of a technological icon, but a telling juxtaposition of a hugely successful company’s willingness to challenge itself to greater excellence by focusing on understanding, planning, and executing for the future even while it was already leading the market.
In contrast to Research in Motion or Best Buy, and many associations, Apple envisioned a future where it was not the market leader. As a result, at the height of its success, after going from good to great, Apple set out to be better—not at what it was doing then, but at what its customers would want in the future.
Like Apple, and other successful organizations (including thriving associations) that are in synch with today’s interactive, knowledge-age environment, associations need to:
- Be “open to numerous possibilities,” including future missions, membership models, and products and services that look nothing like today’s
- Have the “discipline to experiment with conflicting strategies” such as partnering with perceived competitors and knocking their own best-selling products off the market with better ones
- Put in place governance, leadership, staff, product development and customer engagement models that allow the association to move “quickly to embrace” a strategy or identify opportunities “when the direction of the market becomes clear.”
The warning signs are clear. Will associations heed them and make take the necessary actions? Or will many associations go from good to great—to gone?
This article was first published in September 2012, on The Demand Perspective Blog.